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Volume 7 2009

Otago Management Graduate Review

Managing Expatriates Assignments
Gitte Brynningsen Introduction

on

International

The world is becoming more and more global and to be successful, many companies have to compete on the global playing field. This is due to the fact that costs associated with the development and marketing of new products are too great to be amortized only over one market and production costs can be cheaper elsewhere around the world. This globalization of companies is making it more important than ever to understand how multinational enterprises can operate more effectively. One major component of this understanding is the field of human resource management (HRM), and in particular, the field of international human resource management (IHRM; Schuler, Dowling & De Cieri, 1993). According to Harvey and Moeller (2009) there are currently 850,000 subsidiaries of multinational corporations operating globally. Furthermore, 65 per cent of MNCs surveyed in a GMAC global relocation survey are expecting expatriate manager numbers to rise steadily over the next decade (Harvey & Moeller, 2009). Expatriate managers continue to be a viable means for exercising control over foreign operations and they can therefore have a direct impact on organizational performance. This, together with the underlined fact about the growth in the expatriate cadre worldwide, makes it of highly interest to examine the HRM process of international assignments. Furthermore, an international assignment is the single more powerful experience in shaping the perspective and capabilities of effective global leaders. People are the key to success; they are the ones behind the strategy. However, an international assignment is also the single most expensive per-person investment that a company makes in globalizing their people (Black, Gregersen, Mendenhall, & Stroh, 1999). This paper will discuss some of the most relevant stages of the IHRM process, beginning with the selection and concluding with the repatriation stage. It begins with a few definitions and then describes the IHRM process, where each stage is described and discussed in terms of contradictions in the literature. The paper concludes with implications for the company. (Note that the version presented here is a condensed extract from a substantially more complete original paper.)

Strategic International Human Resource Management

It is important to distinguish between IHRM and strategic international human resource management (SIHRM). According to Taylor, Beechler, and Napier (1996) IHRM can be defined as “the set of distinct activities, functions, and processes that are directed at attracting, developing, and maintaining a multinational corporation’s human resources. It is thus the aggregate of the various HRM systems used to manage people in the multinational corporation, both at home and overseas.” This highlights that IHRM is
This assignment was for MANT 436 Advanced International Management 2 Supervised by Assoc. Prof. André Everett 1-17

. functions. SIHRM is used to explicitly link IHRM with the strategy of the multinational corporation. Furthermore. This means high internal consistency and low external consistency. 1996). Harvey et al. both domestic and international. 2001) The adaptive SIHRM orientation is one in which the top management of the MNC attempts to create HRM systems for affiliates that reflect the local environment. p.. In this SIHRM orientation the focus is on substantial global 2 Managing Expatriates . leaving the overseas affiliates with almost no autonomy.Otago Management Graduate Review Volume 7 2009   concerned with identifying and understanding how multinational corporations manage their geographical dispersed workforces in order to leverage their HR resources for both local and global competitive advantage. Strategic human resource management (SHRM) is used to explicitly link HRM with the strategic management processes of the organization and to emphasize coordination or congruence among the various human resource management practices. An integrative SIHRM orientation attempts to take the best approaches and use them throughout the organization in the creation of a worldwide system. This leads to the definition of SIHRM as “human resource management issues. Differentiation is emphasized and the MNC generally copies the HRM systems that are being used locally. (1996) define the parent company’s SIHRM orientation as “the general philosophy or approach taken by top management of the MNC in the design of its overall IHRM system. particularly the HRM systems to be used in its overseas affiliates”. This SIHRM approach is important because it determines the way in which the MNC will manage its IHRM function. 1993. This definition shows that managing people is one of the aspects of SIHRM.. The parent company is replicating the HRM policies and practices used in the home country to its overseas affiliates. This orientation emphasizes high integration of the affiliate’s HRM system with that of the parent company and it is consistent with an ethnocentric approach.. 1996. Strategic Orientation When looking at the human resource management process of international assignments and the management of people. An exportive SIHRM orientation is one in which top management of the MNC prefers a wholesale transfer of the parent company’s HRM system to its overseas affiliates. exportive and integrative (Taylor et al. 2005. 1996). Taylor et al. 2005. Here. and policies and practices that result from the strategic activities of multinational enterprises and that impact the international concerns and goals of those enterprises” (Schuler et al. Three generic SIHRM orientations can be identified: adaptive. This means low internal consistency with the rest of the company and high external consistency with the local environment.. Harvey et al. the parent company’s SIHRM orientation is a key aspect. Taylor et al. subsidiaries are usually managed by local nationals and there is limited intervention or control from the parent organization (Dowling & Welch. 2001).. 422). the MNC’s SIHRM orientation determines its overall approach to managing the tension between integration and the resultant pressure for internal consistency and differentiation and the pressure for external consistency. In the polycentric approach the MNC treats each subsidiary as a distinct national entity with some decision making autonomy. Here affiliates are managed by staff from the home country (Dowling & Welch. This approach is consistent with a polycentric approach to MNC management (Taylor et al. Thus.

and developing (doing things right for people). which are managers from neither the parent nor the host country. & Claus. training (helping people to do the right thing). training and development. 2009). training (and development). This means that each activity builds upon the others as the process becomes an integrated package. Forster.Volume 7 2009 Otago Management Graduate Review integration with an allowance for some local differentiation. They view people management as a set of activities instead of a function of a specific department. 2009. and retaining (Harvey & Moeller. Staffing subsidiary locations focuses on using the most qualified personnel regardless of nationality. rewarding (encouraging the right things that people do). As this description implies. and compensation. No matter how many specific phases the process is divided into the process of managing and supporting expatriates on international assignments can be divided into three broader phases. adjustment and repatriation (Konopaske & Ivancevich. (1999) use people management to effectively move and manage people in global assignments. The integrative SIHRM orientation combines both characteristics of the parent company’s HRM system with those of its overseas affiliates.. They identify five generic functions of managing people: Recruiting/selecting (getting the right people). This is more or less inline with most other researchers who identify at least four stages. Taylor et al. Schuler. Briscoe. This paper will therefore not distinguish between companies in different internationalisation stages.. appraisal. This approach is consistent with the geocentric approach that recognises that each part (affiliates and headquarters) makes a unique contribution with its unique competence. They identify a Global Assignment Success Cycle to conceptualize the term people management through. during the assignment and after the assignment. Brynningsen  3 . The company’s international strategy affects the choice of SIHRM orientation and top management’s attitude toward this orientation can have a significant impact on the direction of the corporate staffing configuration. 2005. The phase before the assignment would usually contain identification. 2000). selection. appraising (determining how people are doing). During the assignment stages such as adjustment. Black et al. before the assignment. The argument for putting compensation in the phase before the assignment is that it is typically agreed upon before the expatriate go on the assignment. 2001. that slightly different issues can emerge as a function of the stage or pattern of a company’s internationalisation. which means high internal consistency and moderate external consistency (Harvey et al. Some researchers extend this and also include other stages such as compensation. However. the SIHRM orientation of an MNC reflects different roles for the headquarters and affiliates in the SIHRM design. but also third country nationals. 1996). it is important to consider. All aspects of people management and thereby the process of managing expatriates on international assignments apply to all companies engaged in transferring people across national borders. 2004. which includes both local and home country nationals. The Process of Managing Expatriates It is very important to develop a basic framework for the discussion of how to manage expatriates on global or international assignments. Dowling & Welch. selection.

if you choose the right people they are more likely to adjust to the foreign culture and environment and thereby succeed in the international assignment. This process. The time before the assignment can vary. This process also overlooks the ability of the candidates and their families to adjust to and function effectively in a new cultural environment. however. When this is the case. According to Forster (2000). Before the Assignment This phase contains selection and training of the expatriate. This triggers the need for recruitment and selection. This means that developing appropriate selection criteria has become a critical SIHRM issue. In recent years the trend has moved towards viewing expatriate assignments as unattractive. They only consider a narrow range of potential candidates. insufficient qualified local country nationals. This paper will look at the stages recruitment and selection. and a need to transfer know-how for international assignments (Scullion & Collings. appraisal and rewarding are important while focus after the assignment should be on repatriation and retaining. many companies have a strong desire to fix the problem as fast as possible. companies have motives such as means of management development and organisational development. training and development. resulting in an obsession with the technical and managerial qualifications of the candidates and their presumed ability to solve the short-term problem. This makes the selection process more about finding people who are willing to go rather than selecting the best candidate from a large pool of applicants (Selmer.. Most often. repatriation. A GMAC-GRS survey from 2002 even found that locating 4 Managing Expatriates . These stages are chosen since it seems like they have the highest impact on the success or failure of the process. No matter how long the time horizon is the company should pay attention to the selection and training stages in the process of managing expatriates. one of the main reasons put forward for a purported high failure rate among expatriate employees is the inadequate selection criteria used by many multinational corporations. sometimes the international assignment arises because of problems that have to be fixed quickly. even though there might only be a slight number of potential candidates there will presumably always be a need for some kind of selection. adjustment. If this is the case the selection process might become less important. However. 2001). 1994). 2006. however. This is essential for the company making selection of great importance (Anderson. for which reason this stage is described and discussed here. 2005). ignores the human resource department and their ability to help. Torbiörn. Others state that selection can influence the adjustment. This technically oriented selection process can easily result in costly premature returns or ineffective performance throughout the assignment (Black et al. 1999). Selection Some international assignments arise because of a problem in a subsidiary. integration. other times it is a process that expands over several months.Otago Management Graduate Review Volume 7 2009   integration. control and coordination.

. leadership skills. This implies that when a candidate is being evaluated for an international assignment. 1999. Scullion & Collings. Researchers have identified several factors that should be considered in the selection of successful international managers. however. Harris and Brewster (1999) are questioning the selection process and they show that the expatriate selection is often an ad-hoc process.. among others: strategic factors. makes the decision. They suggest that the selection process can be started through a casual conversation about an assignment between executives chatting around the coffee machine. Anderson. companies need to integrate strategy into the selection process of global and international employees. Many researchers (Black et al. 1999). domestic circumstances and cultural circumstances. although others may also be involved in the selection process. and gender-related factors (Black et al. Another thing to consider is who should evaluate the candidates. according to Black et al. they need to learn how to incorporate human resources departments’ knowledge with that of the line managers in home and host countries (Black et al. the selection process needs to look at the candidates managerial skills and experience as well as the candidate’s family. the line manger with the overall responsibility for the international unit. Most of these criteria can be divided into technical competence/skills. social skills. most companies tend to rely on a very limited range (Black et al. The company needs to recognize the role of Brynningsen  5 . family requirements. 2005) come to the conclusion that the selection stage is of great importance for the international assignment to be a success for which reason companies should pay attention to this stage and make is as effective and optimal as possible. There is a wide range of selection tools available. Scullion & Collings. Gertsen. it often plays an after-the-fact role. Research and experience have shown that the success of an international assignment is highly dependent on the attitudes of a manager’s family at the time the offer is made to relocate and the ability of the family to adjust during the global assignment. it needs to determine how to evaluate candidates effectively on those criteria. communication skills. work samples and interviews.. Dowling & Welch.. language. 2005.. 1999). Most often. technical ability. 2006). These methods each have their strengths and weaknesses for which reason a combination of selection methods would be optimal to use in selecting the right candidate (Black et al. Some of the most used selection methods are: biographical and background data. conflict resolution skills. cross-cultural suitability. 1999.Volume 7 2009 Otago Management Graduate Review suitable candidates is the top relocation challenge facing companies (Dowling & Welch. The human resources department is often underutilized. When companies send people on international assignments they want the highest possible return on investment. Sending an expatriate to a foreign country often involves sending a whole family. interpersonal competence/skills. MNE requirements. These factors include. it needs to pay more attention to the selection process. which becomes increasingly important. flexibility and stability. 1990. Dowling & Welch. when a company increases its global reach and moves through various stages of globalization. 1999. (1999). only one individual. 2006. For this to be possible. Furthermore. After the company has decided which selection criteria are most appropriate and relevant. 2005). 2005). If companies want to become more strategic in their selection process.

A fundamental criterion for a company’s success is its employees’ ability to understand. Torbiörn. training is considered to be the next critical step in attempting to ensure the expatriate’s effectiveness and success abroad. A study conducted by Puck. and that accurate expectations can be formed by tailored and relevant pre-departure cross-cultural training. interactional or work-setting expatriate adjustment.Phillips. appreciate and adapt to other cultures and to develop a global mindset (Scullion & Collings. Kittler. The study suggests that the more tailored and relevant the pre-departure cross-cultural training. once an employee has been selected for an expatriate position. in turn. there seem to be contradictions in the literature about the effect of cross-cultural training. the more expectations were either met or positively exceeded. particularly where the destination country is considered culturally tough and very different from the domestic culture. Tarique. Training International assignments are often more complex than domestic assignments since they involve going to another country and a different culture. Researchers also suggest that it is essential to ensure that international assignees are adequately trained as so to maximise the benefits that are to be gained from the international career move both in terms of advancing the individual’s career but also in terms of adding value to the organisation (Scullion & Collings. 2006). The study shows that having accurate expectations. 2006). however. A study conducted by Caligiuri. Other studies do. and Wright (2008) found that cross-cultural training has little if any effect on general. and Bürgi (2001) found that cross-cultural training was valuable to the extent it provides accurate expectations among expatriates and therefore creates greater possibility for their expectations to be met or surpassed. They did however find a significant impact of foreign language competence. Bennett. (1999) state that cross-cultural training programs enhance global managers’ job performance. Therefore.. 1999). it can prepare the expatriate going on the international assignment. and Colquhoun (2000) also found that if cross-cultural training is competently managed and well executed it can be a key intervention in promoting assignment success. This study focused on pre-departure cross-cultural training which means that a possible implication for practise is that future expatriates may receive sequential training or post-arrival training as mentioned earlier. and the company that sends them abroad. Black et al. Selmer. and cross-cultural managerial skills. and De Leon (1998) support this finding and states that it is not clear from empirical studies that pre-departure training can provide international managers with the necessary qualities. the family members. This is where training is helpful. adapt successfully to life and work in the foreign location. 6 Managing Expatriates . Lazarova. averting failure. adjustment to their new cultures.Otago Management Graduate Review Volume 7 2009   the entire family unit in determining whether the manager will accept the offer. and increasing the return on investment for all parties involved: the employee. find contradictory results. Aston. positively affects cross-cultural adjustment. Most studies involve the training stage in the process of managing expatriates on international assignments leading people to think that training is of great importance. and complete the assignment. However. This is achieved by evaluating the candidate from a systems perspective that includes family as an integral part (Black et al.

A study from 1984 found that only 25 per cent of US multinationals offered extensive predeparture training programs and a 1989 study found that only 13 per cent indicated that they would offer expatriates a pre-departure program. although a further 47 per cent provided briefings for culturally challenging postings (Dowling & Welch. & Cathro. Gertsen (1990) found that although most personnel managers claim that training is important. and they do not have time for training (Gertsen. therefore. A 2002 study found that cross-cultural training of at least 1 day’s duration was provided by 64 per cent of responding companies. Only about 20 per cent of the companies surveyed offer any kind of formal predeparture training. Brynningsen  7 . not very much is actually done in this respect. they only send their employees to countries that are culturally so much like Denmark that training is unnecessary. A survey from 1995 showed that about 62 per cent of US companies offer some type of cross-cultural preparation. preparation. 1999). Adjustment Regardless of the importance of careful expatriate pre-departure selection. The importance of training all family members for their new roles and responsibilities is clear. they cannot afford it. however. 2008). Kupka. 2000. it is critical that the family unit be regarded as a mutually supportive team. These different findings show that cross-cultural training might not be given the attention it should and that companies might not be aware of its importance. cost of investment. And it seems like that companies do not pay that much attention to cross-cultural training. 1990). US multinationals have been reluctant to provide even a basic level of predeparture training. but it also found that on average. The reasons mentioned for not offering training can be grouped into three main types: inappropriateness of training. In the past... Everett. 2006). they only send people abroad if they already have international experience. many believe that it is after arrival in the foreign location that the most important work can be done to ensure the success of the expatriate assignment (Vance & Paik. Some of the reasons stated by the Danish companies in the research by Gertsen (1990) include that they send to few employees abroad to make it worthwhile. those who receive training get less than a day of it (Black et al. and training. as with the selection process. they do not need training. and time constraints. From this it is difficult to determine if cross-cultural training have an impact on adjustment and thereby the success of the expatriate. this is slowly changing. Only 13 per cent in the survey always provided expatriates with access to cultural awareness courses. since satisfaction of the employee’s partner/spouse and family has a significant impact on employees effectiveness overseas (Bennett et al. Even though there is contradiction in the literature about the impact of cross-cultural training it seems to be of some importance and should not be ignored. During the Assignment When the expatriates and their families are send overseas adjustment and integration are very important aspects of the process of managing expatriates. 2005).Volume 7 2009 Otago Management Graduate Review For the international assignment to be successful.

however. Aycan (1997) states that adjustment is a multifaceted phenomenon which is influenced by both the expatriate manager’s characteristics and the organisational approach to expatriation. the lack of consistent methodological rigor in many of the studies makes generalizing their results problematic. The factors influencing adjustment before departure are related to anticipatory adjustment. only two out of eighteen studies were longitudinal in nature. Furthermore. and employee characteristics and organizational characteristics in the post-arrival period. studies operationalized adjustment in very different ways. which is influenced by accurate expectations and training. and the employment relationship (the psychological contract) to have an influence on the adjustment. rather than a description of phases of adjustment. the U-Curve theory of adjustment has been one of the most consistently used (Black & Mendenhall. Research done by Huang et al. work environment-related factors. Black et al. rather than toward theoretically explaining the adjustment process and why certain factors could be expected to influence adjustment. Dowling and Welch (2005) mentions factors such as inability to adjust to the foreign culture. factors influencing adjustment is divided into employee characteristics and organizational characteristics in the pre-departure period. (1999) divide factors influencing the adjustment dimensions into two categories – those that influence adjustment before departure and those that influence adjustment after arrival. These factors influence general adjustment (made up by psychological adjustment and socio-cultural adjustment) and work adjustment. general adjustment. To be useful for companies dealing with managing expatriates on international assignments the theory should be a theoretical framework of how and why individuals move from one stage to the next. factors related to the individual. which can account for some of the differences in the findings and make comparing findings problematic. length of assignment. A review of the empirical research and findings on the U-Curve theory showed that the majority of the articles indicate support for the U-Curve hypothesis. The factors that influence adjustment after arrival is further divided into four separate categories. interaction adjustment and psychological adjustment. socio-cultural and work domains. Vance and Paik (2006) state that during the culture shock stage the individual is struggling with four major adjustment dimensions in the host country: adjustment to work. willingness to move. several problems prevented them from simply accepting U-Curve as a supported phenomenon.Otago Management Graduate Review Volume 7 2009   Research on cross-cultural adjustment has been geared more toward a somewhat haphazard search for factors that influence cross-cultural adjustment. and adjustment to the general non-work environment. 1991). Black et al. adjustment to interaction with host-country nationals. Even though the U-Curve Theory is a description of adjustment over time. This is partly supported by Aycan (1997) who divides adjustment into psychological. In this model. In the rare cases in which a theoretical perspective has been applied to crosscultural research. They found statistically significant relationship between 8 Managing Expatriates . to the organisation. and to non-work issues. adjustment to work. Most of the studies did not offer statistical tests of the data or report statistically non-significant findings. to the job. (1999) also supports this and states there are three related but separate aspects or dimensions of cross-cultural adjustment. Thus. (2005) focuses on the relations between expatriates’ personality traits and their adjustment to international assignments.

Black & Gregersen. (2005). and openness. Kupka & Cathro. These are factors outside the control of the company. This means increasingly worse candidates are sent overseas. Foster. 1992). They can be too committed to the parent company or to the local operation.. Kupka and Cathro (2007). (2001) have all studied the adjustment of the spouse. Robie. 1999. Florkowski and Fogel (1999) found that perceptions of local ethnocentrism had a negatively effect on work adjustment and commitment to the host unit. Research has repeatedly confirmed the enormous importance of the spouse/partner/family for a successful international assignment (Kupka et al. The company. According to Black and Gregersen (1992) the high competitive pressure. Konopaske. producing even worse organisational results and more failed careers. Over time this means the company’s overseas competitive position erodes. (1999) groups expatriate managers into four patterns of allegiance. Unbalanced allegiance can lead to a variety of failures during and after the international assignments. Poor spouse adjustment is the single greatest cause for expatriates terminating their foreign assignment early (Black et al. Black and Gregersen (1992) and Black et al. Another important factor influencing the expatriate’s adjustment is the adjustment of the spouse and family. particularly when cultural distance was low. 1992). and wide cultural diversity of global operations combined with ineffective management of expatriates can set off a vicious cycle that erodes or even destroys a company’s global competitive position. naturally wants to get the most out of this employee. This further limits the pool of willing and qualified candidates. This suggests that just as with selection and training. 2000). This balance is very important but also a very difficult task. Today’s multinationals need managers who are highly committed to both the parent company and the foreign operation and who try and are able to integrate demands and objectives of both organisations (Black et al. Research do however suggests that managers with high dual allegiance are a rare commodity. they can be highly committed to both organisations or to neither. companies find it increasingly difficult to attract top international candidates. 2005). Most findings suggest that the spouses are often home alone and unprepared and that the company do not provide the necessary support. But the question of allegiance often gets in the way of the individual’s and the company’s success (Black & Gregersen. agreeableness. Kupka et al. 1992). but are still important. And this cycle spirals downward until it becomes nearly unstoppable (Black & Gregersen. both during the assignment and after repatriation. Too committed to the parent company is called Brynningsen  9 . 1999. (2008) and Caligiuri et al. 1998. it is very important to consider the adjustment of the spouse and family as well as the expatriate. They also found that European expatriates were more likely to react negatively to perceptions of host ethnocentrism than were their American counterparts. 2008. Konopaske et al. As managers hear about these failures. Harvey. 2007. Integration A manager who takes on an assignment in a foreign country has the immense task of adapting to a new culture and new business practises.Volume 7 2009 Otago Management Graduate Review expatriate adjustment and the personality traits extroversion. who sends the expatriate. great geographical distances. This means that expatriates all over the world find themselves torn between their allegiance to their parent company and their allegiance to foreign operations. & Ivancevich..

dual citizens are rare and at the same time they may be quite attractive to other companies. would stay with the company upon repatriation. role clarity. Many companies might be aware of the issues concerning expatriates’ dual allegiance. effectively implementing home-office policies in the foreign operation. how it should be done. knowledge. Black et al. These expatriate managers were interested in fully understanding needs. demands.Otago Management Graduate Review Volume 7 2009   expatriates who leave their “Hearts at Home”. knowledge. Furthermore. and who should do it. and would adjust well during the overseas stay. Role ambiguity. According to Black et al. (1999) found that the most powerful job factor creating dual allegiance was role discretion. A “heart at home” expatriate may be the ideal fit for this requirement and conversely.. It requires serious thought and commitment from the company to create dual citizens. highly committed to both organisations is called expatriates who see themselves as “Dual Citizens” and not committed to any of the organisations is called expatriates who see themselves as “Free Agents”. Implementor subsidiaries need someone who has the connections into and orientation toward the source of information. but few have a clear understanding of the causes and consequences of the different patterns (Black & Gregersen. “free-agent” expatriates’ few connections with or little loyalty to the overall organisation is of less consequence. a “free-agent” or “go-native” expatriate would be a very poor fit for this strategic situation. who may try to steal them away. which is simply the freedom that the manager has to decide what needs to be done. objectives. These patterns of allegiance are of great importance but of greater importance are the factors that cause them and the related organisational and individual consequences. Black et al. and passing information and guidance from the foreign operation to corporate headquarters. A “go-native” expatriate may be a great fit for this strategic situation since their natural affinity for and knowledge of the local environment can be just what the parent company needs in terms of 10 Managing Expatriates . (1999) to be confliction expectations. too committed to the local operation is called expatriates who “Go Native”. Role conflict is another important factor in determining whether expatriate managers have low or high commitment to both the parent company and the foreign operation. The single most common source of role conflict was found by Black et al. technology. products and innovations to send out to the parent organisation and other foreign subsidiaries. (1999) it may be possible to capture most of the positives associated with each of the four patterns while avoiding most of the negatives by matching a particular pattern of expatriate allegiance to a particular strategic role of a foreign subsidiary. and opportunities with respect to both the foreign operation and the parent company. Most important is what companies can do to effectively manage this dual allegiance. because an island subsidiary by their strategic function does not require high information and knowledge flows in or out. 1999). and products that are to be implemented. or objectives between the parent company and the foreign operation. In this sense. constraints. and clarity of repatriation programs were also factors related to high allegiance to both the parent and the foreign operation. High dual allegiance was found by Black et al. This created two possibilities. Innovator subsidiaries draw from the local context to produce the information. 1992. when it should be done. (1999) to lead to a higher probability that the managers would stay in their foreign assignments for the expected length of time.

and repatriation programs that reintegrate expatriates and effectively utilize their knowledge. These steps will help companies manage dual allegiances more effectively and help expatriates serve two masters more successfully. which are all related to the work environment. Some actually forget their employees when they are overseas. by instituting a systematic sponsorship program. 1999). This highlights the need for counterbalancing whatever tendency the manager may have.. But one of the most important phases in the process of managing expatriates is the repatriation stage – and it is often forgotten.Volume 7 2009 Otago Management Graduate Review networking and tapping into the local talent pool. by selecting managers with longer tenure in the parent company. The critical issue is therefore to ensure that managers of a particular commitment profile are matched with the appropriate assignment and subsidiary. However. 1999). Steps to be taken to create dual allegiance are greater role clarity. (1999) failure to pay attention to repatriation adjustment can have a negative impact on Brynningsen  11 . no other type of expatriate other than the “dual-citizen” would work as effectively in an integrator subsidiary (Black et al. According to Black and Gregersen (1992) and Black et al. however. The dual directional flow of information. The “dual-citizen” expatriate might function effectively in any of the four strategic subsidiary patterns. and products within integrator subsidiaries requires dual-citizen expatriates. to create high dual allegiance. A company with too many managers who have a “go-native” tendency can counterbalance this tendency by having managers come home for several years before sending them overseas again. When companies send expatriates overseas it is not only important to help them adjust once they are in the foreign country. 1992. it is also very important to integrate them so the international assignment will be a success. however. help families interact with host-country nationals.. (1999) “dual citizen” expatriates are best developed through careful selection processes. The question from companies around the world is often: “why should we pay attention to the adjustment of expatriates and their families during repatriation?” Based on research and experience by Black et al. After the Assignment: Repatriation Some might think that the process of managing the expatriate on an international assignment is over once the expatriate returns to the home country. and experience. well-planned strategies that translate into career systems with clear and consistent job expectations and appropriate levels of freedom and discretion. skills. greater job discretion. help expatriate and their families to adjust to the general non-work environment. this match between managers and assignment and subsidiary is often a difficult task and often. To counterbalance the tendency to leave one’s “heart at home” companies can use younger managers instead of senior managers with long tenure in the parent company. Black et al. and provide training and preparation (Black & Gregersen. and lower conflict. knowledge. technology. the company will have too many managers going in one direction or the other. and by providing pre-departure and/or post-arrival cross-cultural training for managers. The most important step for a company is. pre-departure and post-arrival cross-cultural training programs.

2007. Suutari & Brewster. Dowling and Welch (2005) group the major factors that have been identified as moderators of re-entry readjustment into two categories: job-related factors and social factors. Dowling & Welch. coping with new role demands. Factors influencing post-return adjustment are divided into individual factors. establishing home-country information sources. financial issues.. when the family of an expatriate adjusts during repatriation. individual expatriate manager issues. Several problems have been observed when repatriating expatriate managers to their home country after the completion of their international assignment. and loss of status and pay. and repatriation orientation. home leave. 2003). They divide adjustment into pre-return adjustment and post-return adjustment. Much can be done by the company to achieve successful repatriation of their expatriate managers. family issues. Oddou. Furuya. Suutari & Brewster. (Harvey & Moeller. appreciating contributions to the company. Stevens. Some of the initiatives include defining the strategic functions of repatriation. 2009. organisational issues. adjusting to communicating with home-country co-workers and friends and adjusting to the general living environment. Factors influencing pre-return adjustment are information exchange. developing appropriate compensation. facilitating adequate housing. integrating them into the company (Black et al. and Mendenhall (2006) found that development and implementation of supportive HR policies and practises did have an impact on how satisfied and attached the repatriates felt. preparing the home-country job environment. This is supported by Suutari and Brewster (2003). 2009. The biggest issue discussed is probably the number of expatriates who do not successfully complete their terms in a foreign assignment. Job-related factors include career anxiety. targeting high-risk repatriates. Black et al. Scullion & Collings. establishing a repatriation team. Managing the Entire Process On the basis of the description of the different stages of managing expatriates on international assignments it should be clear that it is very 12 Managing Expatriates . providing support groups. Bird. managing expectations with accurate information. 2006. Furthermore. Social factors include family’s adjustment and effect on partner’s career.Otago Management Graduate Review Volume 7 2009   the bottom line. 2005. work adjustment. a positive spillover effect occurs in which the productive home situation spills over to work and increases an expatriate’s effectiveness. organisational factors and non-work factors. future career issues. which can mean reduced executive and managerial performance. Pollitt. (1999) found that when expatriates adjust effectively during repatriation they are better performers. Black et al. sponsors. Jassawalla & Sashittal. (1999) identify three basic areas that expatriates and their families adjust to when returning home. planning for “downtime”. These are: adjusting to new jobs and work environment. 1999. 2003). Some of the problems that appear to be most troublesome upon repatriation is. This highlights the importance of focusing on the repatriation process and the adjustment together with the factors influencing the adjustment. job factors.

and when these people do not stay in the company and make use of their international experience. 1999). the company has de facto financed the development of global leaders for its rivals (Black et al. This means that U. Suutari & Brewster. 1992. and the perceived impact of corporate turbulence on being able to place expatriates adequately upon their return to be significant predictors of turnover among expatriates.S companies face a 20 per cent change that they will not receive a long-term return in this substantial investment. damaged relationships with customer and suppliers in the foreign country. 2009)... Black et al. Stroh (1995) found that variables such as corporate values related to the importance of an overseas assignment to the organisation. whether the organisation has a career development plan for expatriates. Implications for the Company As stated previously inadequate managing of expatriates on international assignments can have several implications for the company..Volume 7 2009 Otago Management Graduate Review important to manage the whole cycle and not only a few stages. and costs associated with high turnover after repatriation (Black & Gregersen.. 2009. It is very costly for the company to send people on international assignments. 2003. Studies have shown that many expatriates leave shortly after repatriation meaning that companies loose a lot of talented and experienced international staff. there is little evidence to suggest the remedies are producing results. it becomes even more costly for the company. It is unrealistic to assume that all proposed remedies in the literature have entirely escaped companies’ notice. The latter will be of focus in this section. 1999). Furthermore it should also be clear that expatriate managers are simply too important to the current and future financial health of a company to relegate them to a low priority on the top management’s “worry-list” – expatriate managers do indeed play important strategic roles for a company. Based on this research career is an important factor. Suutari and Brewster (2003) found similar results in their research of Finish expatriates. However. and high turnover and associated loss of learning continue. As mentioned earlier some of the implications for the company can be costs associated with failed assignments and replacement of the expatriate. The proportion of expatriate managers who quit and leave within one year after repatriation is approximately 20 per cent for U. And because these employees often leave to join competitors. Turnover among expatriates therefore becomes a very important aspect to understand for companies to be able to retain their repatriated expatriates. knowledge and skills.S expatriates (Black et al. postrepatriation related dissatisfaction persists. It is important for the company to have a strategic and systematic approach to international assignments compared to a more tactical and reactive approach. 1999). The company’s return on investment is no longer long-term when repatriated expatriate managers leave shortly after repatriation. Even worse is the fact that managers are increasingly defining expatriate assignments as preparation for careers in other companies and repatriates seem increasingly reluctant to accept other expatriate assignments (Jassawalla & Sashittal. Jassawalla & Sashittal. 1999. when Brynningsen  13 . Black et al.

This vicious cycle can also have overall implications for the company since it may lead to shortage of leaders who have vital understanding and experience in the global arena. Now the wheel is spinning and this creates a vicious cycle. This may erode or destroy a company’s global competitive advantage (Black et al. who found that expatriates’ career orientation is an important factor in expatriates’ motivation for accepting an international assignment. This can be linked back to the selection stage. increase the likelihood of more failures. A high turnover among expatriates can lead other managers to view international assignments as unattractive. This is supported by Stahl et al. where it might be more about getting people to go rather than selecting the best candidate. (2002). and thereby important for the success of the international assignment. if expatriates accept international assignments to develop their future careers.. (1999) expatriates ask themselves two fundamental career questions when considering an international assignment: Will this assignment put me in a strategic business role? Will this assignment lead to my advancement? This underlines the importance of the career aspect when looking at turnover among expatriates and the motives for going on an international assignment. Even if the only objective for the company is to solve a problem or fulfil a position in a foreign subsidiary due to lack of qualified local employees this all shows that the company needs to focus on the whole process of managing the expatriates. especially when career is proved to be one of the motives for accepting an international assignment. family and stress concerns. work/life balance and development considerations and overestimate the financial imperative and some family motives. Furthermore. otherwise it can have vital consequences for the company. Conclusion The world is becoming more and more global making it more important than ever to understand how multinational enterprises can operate more effectively. (2008) also found support for the importance of career when expatriates decide to accept an international assignment. Dickmann et al. in turn.Otago Management Graduate Review Volume 7 2009   expatriates are going on international assignments and when they evaluate them as either positive or negative. According to Black et al. and turnover problems among expatriates can lead the best managers to view international assignments as bad for their career. This can result in poor strategic planning and implementation and an ever-worsening competitive position globally. and this again can lead to resistance. they view the international assignment as unattractive and this is the word they spread. 1999). When companies are not able to select the best candidate this increases the likelihood of failed assignments. Failed assignments. This reputation makes it difficult for companies to recruit and send top-quality candidates on international assignments which. One major component of this understanding is the field of human 14 Managing Expatriates . Brown (2008) states that there is evidence of high resistance to international assignments in the traditional source pools due to career. They also found that companies significantly underestimate the importance of career. and this does not happen. rumours of expatriates not performing well.

. 1018-1034. Much research has been done in the field of managing expatriates resulting in many different findings. Schuler. & Claus. Caligiuri. which. T. (1992). 225-247... Black. S. The process of managing expatriates of global assignments includes several stages. Oxon. S. J. Z. International Journal of Human Resource Management. & Mendenhall. If companies do not pay attention to the process of managing expatriates on international assignments it can result in a vicious cycle. (1997). S. J. the field of international human resource management. J. R. United States: Addison-Wesley. The theory of met expectations applied to expatriate adjustment: The role Brynningsen  15 . Briscoe. (1991). Great Britain: Routledge Taylor & Francis Group. P. 671-694. together with the growth in the expatriate cadre worldwide.. K... S. & Gregersen.. Expatriate managers continue to be a viable means for exercising control over foreign operations and they can therefore have a direct impact on organizational performance. 8(4). I. L. M. 434-456. P. Globalizing people through international assignments. Dominant stressors on expatriate couples during international assignments. Aston. Bennett. Expatriate adjustment as a multifaceted phenomenon: Individual and organizational predictors. D. Human Resource Management. (1999). This. H. R. When Yankee comes home: Factors related to expatriate and spouse repatriation adjustment.. Literature Aycan. J. This paper examined selection and training before the international assignment. E. (2001). L. makes it of highly interest to examine the human resource management process of international assignments. and in particular. adjustment and integration during the international assignment and repatriation after the international assignment. & Stroh... Phillips. (2000).. B. International human resource management – Policies and practices for multinational enterprises. International Journal of Human Resource Management. Gregersen. lead to an increased likelihood of higher failure rates. R. in turn. Journal of International Business Studies. 39(2-3). & Bürgi. Black. 19(6). (2008). which can result in poor strategic planning and implementation and an ever-worsening competitive position globally. Mendenhall. A. 239-250. Black.. Journal of International Business Studies. Brown. where resistance toward international assignments is leading to fewer candidates for the international assignments. M. Lazarova. J.. This may erode or destroy a company’s global competitive advantage. 22(2).Volume 7 2009 Otago Management Graduate Review resource management. Cross-cultural training: A critical step in ensuring the success of international assignments. This again will lead to resistance and this cycle can carry on going. The U-Curve Adjustment Hypothesis revisited: A review and theoretical framework. M. Tarique. & Colquhoun. B. This vicious cycle can also lead to shortage of leaders who have vital understanding and experience in the global arena. (2009). R. 22. H.

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